FORM 6-K

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of 1934

For May 9, 2007

BLUEPHOENIX SOLUTIONS LTD.
(Translation of Registrant’s Name into English)

8 Maskit Street, Herzlia 46120, Israel
(Address of Principal Executive Offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F x Form 40-F o

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes o No x

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-.....................

This report on Form 6-K is hereby incorporated by reference in the Registration Statements on Form F-3 (Registration No. 333-116044 and 333-133330) as amended, filed by BluePhoenix Solutions Ltd. under the Securities Act of 1933, to the extent not superseded by documents or reports subsequently filed by BluePhoenix Solutions Ltd. under the Securities Act of 1933 or the Securities Exchange Act of 1934.

Attached to the Registrant’s Form 6-K for May 9, 2007 and incorporated by reference herein is the Registrant's immediate report dated May 9, 2007.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BLUEPHOENIX SOLUTIONS LTD.
(Registrant)


By: /s/ Oranit Berko
——————————————
Oranit Berko
Corporate Controller

Dated: May 9, 2007

BLUEPHOENIX SOLUTIONS REPORTS Q1 RECORD REVENUES OF
$20 MILLION & $2 MILLION NON-GAAP NET INCOME

— Ninth Quarter of Sequential Growth

— Continued Strong Cash Flow

Herzlia, Israel –May 9, 2007 – BluePhoenix Solutions Ltd. (NASDAQ: BPHX), a leading provider of value driven modernization solutions for legacy information systems, today reported record financial results for the first quarter ending March 31, 2007.

For the first quarter of 2007, BluePhoenix reported record sales of $20 million, up 25 % from $16 million in the first quarter of 2006, and up 10 % as compared to $18.3 million in the prior quarter. This was the ninth quarter of sequential growth.

Operating income on a non-GAAP basis for the first quarter was a record $ 2.5 million, up 32% from $1.9 million in the first quarter of 2006 and up 13 % from $2.2 million in the prior quarter. The non-GAAP operating income excludes the amortization and capitalization of intangible assets, depreciation of property and the effect of Stock –Based compensation. As a percentage of revenues, the operating income for the first quarter was 12%. The operating expenses were slightly impacted by the devaluation of the US Dollar as compared to the Israeli Shekel.

Net income on a non-GAAP basis for the first quarter, excluding non-cash financial expenses mainly related to the convertible debentures, was a record high of $2 million, or $0.13 per share, as compared to $1.4 million, or $0.10 per share, in the first quarter of 2006, and $1.65 million, or $0.11 per share, in the prior quarter.

First quarter GAAP based net income, was materially affected by the non-cash expense related to the conversion of $3.2 million of the convertible debentures into shareholders capital thus reducing the overall debt of the company. The net GAAP based net income was $125,000, or $0.01 per share, as compared to $949,000, or $0.07 per share, in the first quarter of 2006.

“We are very proud of our results. The accelerated sequential growth of BluePhoenix is a constant proof and reassurance of our ability to identify the growing needs in the market and tailor our Company’s structure to provide a unique combination of software tools and services that solve our customers’ business problems through the implementation of our special software modernization solutions,” stated Arik Kilman, Chief Executive Officer of BluePhoenix.

Kilman continued, “Our revenues grew from $58 million in 2005 to $68 million in 2006, and are expected to exceed $80 million in 2007. The first quarter had a strong cash flow: we generated a positive cash flow from operations of over $5 million. In order to increase the momentum of growing profitably, together with the expansion of the organization, we have started to implement a restructuring plan that is aimed at cutting the operational costs of the Company by approximately $3 million on an annual basis. The one time restructuring plan is expected to cost approximately $2 million. The implementation will include the reallocation of our delivery and Research and Development tasks to our low cost off-shore centers such as the one we are acquiring in St. Petersburg. This plan will gradually be further implemented, and start showing significant results in the second half of 2007. “

BluePhoenix has scheduled a conference call Conference Call on Wednesday, May 9th, 2007. at 10:00 A.M. EDT (17:00 Israel Time)

Arik Kilman, Chief Executive Officer, and Iris Yahal, Chief Financial Officer will discuss the First Quarter of FY 2007 and will be available to answer questions.

Interested parties are welcome to call the telephone numbers listed below, five to ten minutes prior to the start of the conference call.

In the US call: (800)-288-8975

Outside the US call: +1-(612)-332-0637

Callers should reference “First Quarter Results on May 9th, 2007” to the AT&T conference call operator.

An automated replay of the conference call will be available from May 9th 2:00 P.M. until May 11th at 11:59 P.M. (EST)

To access the replay please call

(USA) (800)-475-6701

(International) +1-(320)-365-3844

and enter BluePhoenix Solution’s access code of 872414

The automated replay can also be accessed at any time through our Web site, under the investor relations section.

About BluePhoenix Solutions (www.bphx.com)

BluePhoenix Solutions (NASDAQ: BPHX) is a leading provider of value driven modernization solutions for legacy information systems. BluePhoenix’s offering includes a comprehensive suite of tools and services from global IT asset assessment and impact analysis to automated database and application migration, rehosting and renewal. Leveraging over twenty years of best practice domain expertise, BluePhoenix works closely with its customers to ascertain which assets should be migrated, redeveloped or wrapped for reuse as services or business processes, to protect and increase the value of their business applications and legacy systems with minimized risk and downtime.

BluePhoenix’s solutions serves companies from diverse industries and vertical markets such as automotive, banking and financial services, insurance, manufacturing and retail. Among its prestigious customers are: Aflac, DaimlerChrysler, Danish Commerce and Companies Agency, Europe Assistance, Lawson Products, Los Angeles County Employees Retirement Association, Merrill Lynch, SDC Udvikling and TEMENOS. BluePhoenix has 13 offices in the U.S., UK, Denmark, Germany, Italy, Russia, Romania, Cyprus and Israel.

(Tables to Follow)

SAFE HARBOR: Certain statements contained in this release may be deemed forward-looking statements, with respect to plans, projections, or future performance of the Company, the occurrence of which involves certain risks and uncertainties that could cause actual plans to differ materially from these statements. These risks and uncertainties include but are not limited to: market demand for the Company’s tools, successful implementation of the Company’s tools, competitive factors, the ability to manage the Company’s growth, the ability to recruit and retrain additional software personnel, and the ability to develop new business lines.

Non-GAAP Financial Measures

To supplement BluePhoenix’s consolidated financial statements presented in accordance with GAAP, BluePhoenix provides non-GAAP net income (loss) and non-GAAP net income (loss) per share data. The presentation of these non-GAAP financial measures should be considered in addition to BluePhoenix’s GAAP results and is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. BluePhoenix’s management believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance by excluding certain charges, gains and tax effects that may not be indicative of BluePhoenix’s core business operating results. BluePhoenix believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing BluePhoenix’s performance. These non-GAAP financial measures also facilitate comparisons to BluePhoenix’s historical performance and its competitors’ operating results. BluePhoenix includes these non-GAAP financial measures because management believes they are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. Non-GAAP measures are reconciled to comparable GAAP measures in the table entitled “Non-GAAP Calculation of Net Income (Loss) Excluding Special Items” following the text of this press release.

Please refer to the Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP tables below.

All names and trademarks are their owners’ property.

Company Contact: Iris Yahal +972-9-9526110

Investor Contact: Paul Holm +1-212-888 4570

BluePhoenix Solutions Ltd.

NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)

	Three months Ended March 31,																		Year Ended December 31,
	2007 Non-GAAP			Adj.			2007 GAAP			2006 Non-GAAP			Adj.			2006 GAAP			2006 Non-GAAP			Adj.			2006 GAAP
REVENUES		20,065						20,065			16,029						16,029			68,004						68,004
OPERATING EXPENSES
Cost of revenue		6,522						6,522			5,142						5,142			21,343						21,343
Software development costs, net		4,930						4,930			3,772						3,772			16,941						16,941
Selling, General and Administrative expenses		6,128						6,128			5,236						5,236			21,130						21,130
Amortization of intangible assets, net					(149	)		(149	)					(34	)		(34	)					(369	)		(369	)
Depreciation of property					199			199						194			194						979			979
Stock-based compensation					37			37						10			10						40			40
Total Operating Expenses		17,580			87			17,667			14,150			170			14,320			59,414			650			60,064
OPERATING INCOME		2,485			(87	)		2,398			1,879			(170	)		1,709			8,590			(650	)		7,940
OPERATING MARGIN %		12	%					12	%		12	%					11	%		13	%					12	%
Financial expenses, net		(371	)		(1,635	)		(2,006	)		(493	)		(280	)		(773	)		(2,301	)		(1,214	)		(3,515	)
Other income, net											14						14			282						282
INCOME BEFORE TAXES		2,114			(1,722	)		392			1,400			(450	)		950			6,571			(1,864	)		4,707
Taxes on Income		118						118			45						45			(282	)					(282	)
		1,996			(1,722	)		274			1,355			(450	)		905			6,853			(1,864	)		4,989
Minority interest		(1	)		(148	)		(149	)		51			(7	)		44			(282	)		(35	)		(317	)
NET INCOME		1,995			(1,870	)		125			1,406			(457	)		949			6,571			(1,899	)		4,672
EARNINGS PER SHARE:
Basic		0.13						0.01			0.10						0.07			0.47						0.34
Diluted		0.13						0.01			0.10						0.07			0.46						0.33
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING :
Basic		14,874						14,874			13,699						13,699			13,889						13,889
Diluted		15,565						15,565			14,122						14,122			14,371						14,371

BluePhoenix Solutions Ltd.

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

	March 31, 2007		December 31, 2006
ASSETS
Current Assets:
Cash and cash equivalents	$	15,321	$	11,627
Marketable securities		607		1,053
Trade accounts receivable		26,275		26,489
Other current assets		3,827		3,096
Total Current Assets		46,030		42,265
Non-Current Assets:
Long-term trade receivable		1,024		1,390
Property, net		2,143		2,147
Other assets, net		81,928		81,664
Total Non-Current Assets		85,095		85,201
TOTAL ASSETS	$	131,125	$	127,466
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Short-term credit from banks	$	625	$	609
Current portion of long term convertible debentures		6,491		4,482
Trade accounts payable		5,072		4,594
Deferred revenue		7,690		7,790
Other current liabilities		6,936		6,929
Total Current Liabilities		26,814		24,404
Non-Current Liabilities
Convertible debentures		9,209		14,049
Accrued severance pay, net		2,036		1,718
Provision for losses in formerly-consolidated subsidiary		1,971		1,971
Loans from banks and others		19,932		20,027
Minority interests		5,497		5,348
Total Non-Current Liabilities		38,645		43,113
Shareholders' Equity		65,666		59,949
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	131,125	$	127,466

BluePhoenix Solutions Ltd.

CONDENSED CONSOLIDATED CASH FLOWS STATEMENTS
(In thousands)

	Three months ended March 31,			Year ended December 31,
	2007			2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	125		$	4,672
Adjustments to reconcile net income to net cash provided by operating activities:
Minority interests in profits of subsidiaries		149			317
Depreciation and amortization		2,346			8,481
Increase in accrued severance pay, net		318			409
Gain on sale of property		(3	)		(32	)
Change in value of long term-loans and liabilities		1,223			1,853
Stock - based compensation		37			40
Deferred income taxes, net		-			13
Changes in operating assets and liabilities:
Decrease (increase) in marketable securities		446			(715	)
Decrease (increase) in trade receivables		580			(9,731	)
Increase in other current assets		(731	)		(909	)
Increase in trade payables		478			1,390
Increase in other accounts payable		422			4,186
Net cash provided by operating activities		5,390			9,974
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property		(201	)		(676	)
Proceeds from sale of property		8			161
Capitalization of software development and other costs		(2,200	)		(8,259	)
Purchase of minority interest in subsidiaries and purchase of activity		(306	)		(1,118	)
Investment in newly-consolidated subsidiaries and purchase of newly-activity		--			(13,224	)
Net cash used in investing activities		(2,699	)		(23,116	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Short-term bank credit, net		(152	)		(14,013	)
Repayment of long-term loans		(34	)		(1,149	)
Receipt of long-term loans		--			14,391
Issuance of convertible debentures and warrants		--			14,140
Debentures issuance costs		--			(655	)
Exercise of employee share options and warrants		1,189			730
Sale of shares held by a subsidiary					534
Net cash provided by financing activities		1,003			13,978
NET INCREASE IN CASH AND CASH EQUIVALENTS		3,694			836
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR		11,627			10,791
CASH AND CASH EQUIVALENTS AT END OF YEAR	$	15,321		$	11,627